Bitcoin Surges Past $100K Driven by Institutional Investments and Favorable Economic Conditions – Bitfinex

Bitcoin (BTC) experienced a decline of 2.5% in the last day, now trading around $101,600, resulting in nearly $200 million in liquidations of open long positions. However, the latest report from “Bitfinex Alpha” emphasizes that the on-chain indicators remain positive.

This price fluctuation follows a significant rally, with Bitcoin climbing from a recent low of approximately $74,000 to a peak of $105,660, which is merely 3.6% short of its all-time high of $109,590.

Despite a recent slight retreat on May 12, Bitcoin is still holding its ground in the six-figure range. As of the latest update, BTC is valued at $102,606, reflecting a drop of 1.53% over the previous 24 hours, according to data from CryptoSlate.

The recovery has propelled BTC back above the $100,000 mark for the first time in more than three months, illustrating a broader change in market sentiment and a reassessment of risk assets following the May meeting of the Federal Reserve.

The report indicated that the Federal Open Market Committee (FOMC) meeting provided options without causing alarm in the markets.

Even though interest rates were maintained, Fed Chair Jerome Powell acknowledged indications of a slowdown in economic activity and decreased consumer demand, suggesting a more cautious approach to future rate adjustments.

Additionally, diminishing trade tensions between the US and China have lowered geopolitical risks, fostering renewed interest in assets like Bitcoin, which have shown resilience compared to stocks in recent periods.

Improved realized cap and reduced unrealized losses

This change in economic positioning has led to a readjustment of capital distribution within the cryptocurrency market.

Bitcoin’s realized cap, which reflects the total cost basis of circulating coins, reached an all-time high of $889 billion this week, indicating net inflows into the network and increased trust from investors.

In the past month, the realized cap has risen by 2.1%, signaling new capital support for recent gains, rather than speculative trading or leverage-driven movements.

Another significant on-chain development is the decrease in Bitcoin held in unrealized losses. During the March-April correction, over 5 million BTC were in loss, making up roughly 25% of the circulating supply.

As of this week, that number has fallen to about 700,000 BTC, or less than 3% of the active supply, indicating a shift towards a market structure dominated by profits. This kind of supply movement has historically supported higher price levels and increased demand.

Institutional interest resurging

The report highlighted that institutional participation continues to strengthen these market dynamics, with spot Bitcoin exchange-traded funds (ETFs) seeing over $920 million in net inflows in the last two weeks.

A significant portion of this came from BlackRock’s IBIT, accounting for more than half of the total influx. The majority of trading activity occurred during US trading hours, with approximately 70% to 80% of transactions happening between 10 A.M. and 4 P.M. Eastern Time.

This trend suggests a preference for systematic allocation strategies rather than discretionary trading, particularly in light of the low volatility and steadily increasing spot trading volumes.

Moreover, ETF inflows seem to be increasingly detached from short-term price fluctuations. This separation, together with strong net inflows and ongoing macro adjustments, has helped maintain stability in Bitcoin markets despite recent price corrections.

The patterns in flow and price stability indicate that institutional demand acts as a support mechanism, mitigating declines and establishing a floor for BTC valuations. In addition, changes in the US Treasury market further bolster the risk-on sentiment.

The 10-year Treasury yield dropped by nine basis points this week, while the US Dollar Index (DXY) fell below 104.50. Furthermore, as reflected in 5Y5Y swaps, inflation expectations remained stable, aligning with favorable liquidity conditions for digital assets.

If favorable macroeconomic winds persist, Bitcoin’s current pricing might serve as a base for further accumulation.

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